Requests for Exemptive Relief Under the SEC Treasury Clearing Rule
Summary
SIFMA 1 provided comments on notices of request from exemptive relief issued by the U.S. Securities and Exchange Commission (SEC), one from SIFMA 2 , and the other in relation to a request from the Institute of International Bankers (IIB) 3 , each requesting an exemption pursuant to Section 36 of the Securities Exchange Act of 1934 (“Exchange Act”) from the application of certain aspects of the inter-affiliate exemption in the SEC’s Treasury clearing rule. 4
Excerpt
Background
The SIFMA Request asked the SEC to, among other things, disapply the Outward-Facing Condition to the Inter-Affiliate Exemption so as not to include Repo Transactions between non-U.S. affiliates and non-U.S. counterparties (including between two non-U.S. affiliates) to the extent the firm is able to meet a certain Proposed Condition, described further in the SIFMA Request. This request was termed the “SIFMA 10 Percent Non-U.S. Affiliate Relief”.
The IIB Request asked the SEC to grant an exemption (the “Non-U.S. Transactions Exemption”) from the clearing requirement for Eligible Secondary Market Transactions between (i) a Direct Participant that is not a U.S. person (as defined by Exchange Act Rule 3a71-3), a U.S. branch of a non-U.S. person, or non-U.S. person whose obligations under the transaction are guaranteed by a U.S. person (a “Non-U.S. Direct Participant”) and (ii) a counterparty that is not a Direct Participant, a U.S. person, a U.S. branch of a non-U.S. person, or a non-U.S. person whose obligations under the transaction are guaranteed by a U.S. person (a “Non-U.S. Client”). In a subsequent comment letter submitted on April 10, 2026 (the “April 10 IIB Letter”), the IIB further proposed exempting those Repo Transactions between a Non-U.S. Client and a foreign affiliate of a Direct Participant from the Outward-Facing Condition, as well as Repo Transactions between a foreign branch of a U.S. Direct Participant and a non-U.S. Client from the clearing requirement. 5
On May 29, 2026, the IIB submitted a comment letter (the “May 29 IIB Letter”) relating to the SIFMA Request and the IIB Request that reiterated its position that an activity limit or volume-based cap for the Non-U.S. Transactions Exemption was inappropriate.6 It also stated that if the SEC deemed an activity limit or volume-based condition to be appropriate, the SEC should implement a volume cap on the aggregate amount of transactions qualifying for the Non-U.S. Transactions Exemption (“Qualifying Non-U.S. Transactions”) entered into by a firm and its affiliates over a specified period. The May 29 IIB Letter proposed the cap for each firm be set at the greater of a (i) firm-specific ratio-based cap, described as a certain specified percentage (the “firm-specific ratio”), or (ii) a fixed dollar threshold, defined as the same specified percentage of market-wide U.S. Treasury repo transactions activity divided by the number of corporate groups having one or more subsidiaries that participate as direct participants at U.S. Treasury CCAs (the “market-wide ratio”).
- SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry-coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
- Notice of Request for Exemptive Relief, Pursuant to Section 36(a) of the Securities Exchange Act of 1934, From Certain Aspects of Rule 17ad-22(e)(18)(iv) of the Securities Exchange Act of 1934 and Request for Comment [Release No. 34-105262; File No. S7-2026-11], 91 Fed. Reg. 21533 (Apr. 22, 2026). Terms capitalized but not defined herein have the meaning given to them in the letter underlying the SIFMA Request, available here.
- Notice of Request for Exemptive Relief, Pursuant to Section 36(a) of the Securities Exchange Act of 1934, from Certain Aspects of Rule 17ad-22(e)(18)(iv) of the Securities Exchange Act of 1934 and Request for Comment [Release No. 34-104944; File No. S7-2026-07], 91 Fed. Reg. 12030 (Mar. 11, 2026).
- Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule with Respect to U.S. Treasury Securities, 89 Fed. Reg. 2714 (Jan. 16, 2024).
- Letter from Stephanie Webster, General Counsel, IIB (Apr. 10, 2026), available here.